On 16 April 2003 Sony Computer Entertainment Europe Limited and two other Sony companies issued proceedings in the Chancery Division of the High Court against BT mobile telecoms offshoot O2 and its advertising agency Vallance Carruthers Coleman Priest.

The causes of action were infringement of two registered community trademarks, passing off and copyright infringement. An injunction preventing any further infringing activity, an enquiry as to damages, delivery up or destruction of all infringing material and costs were demanded.

The bone of contention was a TV, outdoor print and ambient media campaign launched on 4 April. Above the sub heading "More cross network minutes and texts than other networks", the O2 campaign featured four symbols presented like neon signs and consisting of a square, a "T", an upturned triangle and a circle.

Sony's beef was that these four symbols were far too close to the triangle, circle, cross and square that feature prominently on its Playstation game console controllers. They are also the subject of two registered community trademarks and used heavily in Sony advertising.

In its defence, O2 says that the whole idea of the campaign is to demonstrate to O2 customers that they can use their inclusive minutes and texts to call any network. The four symbols represent the four major mobile networks, presumably Orange, T Mobile, Vodafone and O2 itself.

Within 12 days of the campaign's launch Sony had issued their proceedings. They may have contemplated applying to the Court for an immediate "interim injunction" which would quickly ban further use of the campaign until a full trial in maybe a year or so's time. However, they did not go this route in the end, opting for a speedy trial to take place in June or July.

But this was not the end of the rapid developments, as by 14 May it had been announced that the parties had reached a settlement under which the O2 advertising complained of would cease the end of May.

Why this matters:

After conclusion of the settlement, O2 announced the campaign would not have run beyond the end of May anyway, and with over seven weeks' extensive use completed by that time, it may be that the principal commercial objective of the campaign was achieved in any event.

However, the rapid issue of proceedings against a total of four different parties, including O2's advertising agency, will inevitably have involved significant management time in dealing with lawyers and insurers, as well as not insignificant legal fees and embarrassing publicity.

All concerned clearly decided that it was in everybody's best interests to stop the legal roller coaster. But did O2 need to settle and is there a trademark infringement, passing off or copyright infringement here?

So far as trademark infringement is concerned, Sony probably had a reasonably strong case, but it would not have been without difficulty.

The Sony Community Trade Marks are not registered for telecommunications services, and although the increasing use of mobile phones to play games has brought the two sectors closer together, there still may have been something of an argument over whether mobile telecommunication services and computer games were "similar" goods or services.

If Sony were successful in establishing that there were such similarity, it would "only" have to prove that there was a likelihood of confusion in order to establish a case of trademark infringement. Easy? Given that the O is part of the O2 brand and there is no X in the O2 ad, the brand awareness and sensitivity of the relevant marketplace might suggest that real confusion that the O2 symbols come from Sony is not that likely.

If "similarity" were not established, then Sony would have to show that the Sony icons had a reputation in the UK and that O2's use of their symbols without due cause took unfair advantage of or was detrimental to the distinctive character of the Sony icons. Assuming that the O2 justification for the use of the symbols flies, we do not believe Sony would have had an open and shut case here, and the same would in our view have applied to both copyright infringement (query what aspect of any truly original artistic work contained in the Sony icons has been substantially copied?) and passing off claims (what real "misrepresentation" or confusion given the wording in the O2 ad and in any event what damage?).

Having said this, a "50/50" at best scenario for O2 in its defence of the claims was hardly an attractive prospect with the substantial costs of a July trial looming, so all in all a settlement looks to have been the best solution all round. One hopes that Vallance Carruthers Coleman Priest and O2 were fully aware of the risks they were running before the launch of the campaign and happy to share those risks, so that the agency/client relationship has survived what will undoubtedly have been a testing time.